“If Obama’s efforts to create a viable regulatory framework in which individuals can buy private health insurance (a) pass congress, and (b) turn out to work well and be popular, then you can imagine a version of Ryan’s plan being put into place. But in the absence of that kind of reform, I just don’t see how you can do this, which is presumably why the implementation is delayed all the way to 2021 which helps Ryan avoid needing to think about implementation details.” ~ Matt Yglesias, writing about Rep. Paul Ryan’s alternative budget

I think Yglesias actually makes a pretty strong point here.  While I’m overall fairly sympathetic to Ryan’s budget – he does, after all, balance it (at least according to the CBO report [pdf]), something virtually no other politician is willing to even propose – I think there is a fundamental flaw with implementing a healthcare voucher program without first fixing the broken, dysfunctional health insurance market.  The exchanges created in Obamacare would be one way to do this. 

What Yglesias does not point out, however, is that Ryan’s budget proposal also puts an end to the tax exemption for employee benefits.  Simply coupling this tax reform with the ability to purchase insurance across state lines creates an entirely new health insurance market.  Suddenly people on the individual market are given the same tax preference as people who receive their insurance from an employer.  Health insurance drifts away from employers and becomes personal and portable.  People wouldn’t lose coverage when they left their jobs.  Meanwhile, insurers would lose their long-held local and state monopolies and be forced to compete nationally, driving down costs both through added competitive pressures and by the better bargaining powers that these large, national firms would have, with their much larger, national cost-sharing pools.

Of course, the hard questions in healthcare will center around two inextricably linked concepts – pre-existing conditions clauses, and individual mandates.  Almost all modern democracies have some form of universal coverage, and the only way that it has been achieved with any semblance of a free market has been by doing away with pre-existing conditions clauses and implementing some sort of individual mandate.  If the former is done without the latter, nobody would buy insurance until they were sick – defeating the purpose (and the viability) of insurance to begin with.

Other alternatives exist, of course.  My personal preference is a model along the lines of Singapore’s healthcare system, which mandates health savings accounts and then picks up the tab on any costs above a certain flat percentage of income.  This puts healthcare directly in the hands of the consumer (cutting out insurance companies altogether) and provides them with catastrophic coverage if something should go wrong.  Furthermore, by placing costs and transactions directly in the consumers hands, it keeps costs from skyrocketing.  The mandated savings would be flat, but the catastrophic coverage functions progressively, covering less and less as income rises.

Either way, before any privatization of Medicare and Medicaid can occur, the private insurance market must be transformed.  Paul Ryan has shown true grit in crafting a budget that is actually balanced, but the possibility of backlash to cuts in entitlements is very real if the systemic problems in our healthcare system aren’t taken care of first.  Both Yglesias and Ezra Klein see this budget as a sort of draconian rationing of benefits for seniors and poorer Americans. If the insurance market could actually be fixed, however, then the system of vouchers which Ryan proposes would be adequate and possibly even better alternatives to the status quo.

Conservatives demonize liberals, and liberals caricaturize conservatives.  And perhaps I’m picking at nits with this, but there does seem to be a difference between the two.

In popular conservative myth, liberals “hate America” and long for some neo-Stalinist socialism.  Liberals are painted as weak and yet entirely capable of running a massive state/media coup of the nation in order to redistribute wealth and impose draconian regulations and taxation on honest, hard-working Americans.  And the motivation for this?  Dread “multi-culturalism” and America hatred for hatred’s sake.

Liberals, on the other hand, act as though the loudest and most verbose of their critics in fact represent not only the conservative movement, but the very philosophy upon which conservatism draws.  Certainly the phrase “conservatism is dead” is second only to its younger cousin “rock is dead” in frequency of use.  And second, only because “rock is dead” makes for a far better t-shirt.  This supposition is drawn, often as not, from a caricaturization of the movement or philosophy based mainly on its chest-thumping class of pundits.  If Rush Limbaugh is a conservative, after all, then certainly this is how all conservatives must be – ergo, conservatism is dead.  (Man cannot live on Rush alone, after all!) [Read more →]

Then, both he and Kevin Drum, go on to point out that job losses are likely going to be long-term.

Drum writes:

I don’t want to push this theme too far because I haven’t yet done the work to really get a reliable sense of what’s going on.  But I wonder, when this recession is finally over, if we’re going to find ourselves in a European-esque mode with a large and growing population that’s almost continually unemployed or, at best, underemployed.

I posed this question to some friends the other night over beers: If immigration restrictions between the U.S. and the E.U. were lifted entirely, what would happen? [Read more →]